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U.S. economy adds 175,000 jobs in February despite harsh weather

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WASHINGTON — Employers churned out more new jobs than expected last month despite snowstorms and bone-chilling weather that kept consumers and workers at home through much of the country.

The U.S. economy added a surprisingly robust 175,000 net new jobs in February, a significant improvement over the previous month's weak growth of 129,000 jobs, the Labor Department said Friday.

Despite the increase, the largest in three months, the unemployment rate ticked up 0.1 percentage point to 6.7% after hitting a more than five-year low in January.

"The economy clearly is exhibiting early signs of cabin fever after a long winter and even greater job gains can be expected in the next few months," said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York. "Spring is in the air."

Workers still felt the weather's effect: The storms in the East, especially, cost millions of workers untold lost hours. But partly because of the way the government crunches the numbers, the weather didn't appear to have hurt job growth in a major way.

That surprised many economists, who had projected that the economy added 150,000 net new jobs last month. The uncertainty over the weather's effect led to an unusually wide range of estimates — from 80,000 to 203,000 — as recent data showed signs that the economy had weakened in the face of bitter cold and snow.

The labor market had been humming along last year before the number of new jobs plunged with the winter's temperatures.

After averaging 204,000 net new jobs through November, December's figure fell to 75,000. January didn't look much better, with an initial estimate of a dismal 113,000.

California provided a reminder of that weakness Friday as officials reported that the state lost 31,600 net jobs in January. Despite the losses, the state's unemployment rate dropped to 8.1% from 8.3% the previous month.

On Friday, the Labor Department revised the national January figure to a gain of 129,000 jobs. The December number was revised up as well, boosting growth by a total of 25,000 more jobs in those two months than the government initially reported.

And February's job creation figure was relatively strong. The private sector created 162,000 net new jobs, with governments adding an additional 13,000, the Labor Department said.

Construction companies increased their payrolls by 15,000, while manufacturers added 6,000 net new jobs. Retail employment was down by 4,000 jobs.

"You clearly get a sense that weather has played a big role over the last few months," Chad Moutray, chief economist for the National Assn. of Manufacturers, said of that industry's recently weak job creation figures. "I think the jury is still out over whether it's just the weather."

The percentage of people in the workforce held steady at 63% last month, a historically low level. The average workweek shrank 0.1 hour to 34.2 hours, but average hourly earnings rose 9 cents to $24.31.

Although winter storms didn't push down job creation, they still caused plenty of problems.

The Labor Department said 601,000 non-agricultural employees missed work in mid-February because of the weather, up from 262,000 in the middle of January. Last month's number was the largest since November 2012 in the aftermath of Superstorm Sandy.

But most of the people who missed work last month probably still were counted as employed. The Bureau of Labor Statistics surveyed businesses during the week of Feb. 9-15, when a major snowstorm hit much of the eastern U.S.

A person must be out of work with no pay for an entire pay period to be counted as unemployed. About 80% of workers are paid biweekly, according to the BLS.

"If you get paid every two weeks, all you have to do is work one hour in that pay period," said Keith Hall, a research fellow at George Mason University's Mercatus Center and a former BLS commissioner.

"It's actually pretty hard to not be counted," he said.

Jason Furman, chairman of the White House Council of Economic Advisers, said the weather did not push up the unemployment rate because those workers continued to be counted as employed.

But he said "it is likely that the unusual increase in weather-related absences had some effect on payroll employment and average weekly hours."

In addition, 6.9 million people who normally work full time reported working only part time in February because of the weather. That was the most since January 1996, when a historic blizzard hit the East Coast.

The Labor Department noted that "severe winter weather occurred in much of the country" during the week it surveyed households and businesses. That normally causes a drop in average weekly hours worked.

"I think most of the [weather] impact was on hours worked," said Gad Levanon, director of macroeconomic and labor market research for the Conference Board.

Construction was the industry most likely to see a drop in hiring because of bad weather, economists said. Job creation fell off in February after an unusually large 50,000 positions were added the previous month. But the construction industry still added a solid 15,000 positions, which was a little more than the monthly average over the last year.

"We're really surprised and reaching here to explain why weather hasn't had quite the impact that we thought" on construction jobs, Rupkey said.

jim.puzzanghera@latimes.com

Copyright © 2014, The Baltimore Sun
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